Posted On: 11/01/2005
Whether you’re sitting down to a restaurant meal of a burger or filet mignon, the food on your plate probably went through many hands to get from the person who produced it to the one who cooked it. We hear a lot about those two end points, but the middle is as mysterious as the contents of the Sysco tractor-trailers that whiz by on the highway.
The supply process is largely hidden from consumers’ view – and even when a restaurant follows the current trend of listing the local producers next to the items on the menu, few of us know what that means in terms of ordering, shipping and stocking.
We might guess that the chef is in charge of the ordering, but even that depends on the size and philosophy of the company. Many chefs do place orders, but not all do. At larger businesses, purchasing agents or food-service managers may do it; at small restaurants, it may be the owner.
Some orders go out online, particularly from huge corporate feeders like Aramark and Sodexho, who are buying for thousands of meals a week. Often independent restaurants talk to the sales reps at their suppliers, who then submit orders via the Internet.
Buying from small local providers is often entirely different. “It’s not computerized with them,” said Marc Foley, executive chef at Bon Appetit’s Washington University operation. “You’re lucky if they have a fax machine.”
Paul Arnot, a marketing associate with Sysco Food Services of St. Louis, estimated that 60 percent of restaurants use several purveyors, most often a produce company, a fresh seafood company and a broad-line distributor like Sysco. They “service almost every aspect of the restaurant,” supplying everything from canned goods to cleaning supplies. Broad-line distributors are often huge; Sysco in particular has more than 400,000 customers, had $29.3 billion in sales for fiscal year 2004 and stocks more than 10,000 items in the St. Charles distribution center alone. A key competitor, U.S. Foodservice, has 250,000 customers, sales of $17 billion and, according to its Web site, carries more than 43,000 items.
One U.S. Foodservice customer is Andy Ayers, owner of Riddle’s Penultimate Café and Wine Bar. “By dollar volume I have a few big suppliers and very many little ones,” Ayers said. He has used different broad-line distributors in the past, and he knows that “what I need is a salesperson who can run interference with their bureaucracy.” Ayers also buys off-season and exotic fruits and vegetables from a fresh-produce jobber.
In addition to those comprehensive sources, restaurants may also buy directly from brokers. “We are the manufacturers’ representative,” explained Tim Kammeier, vice president of Osage Marketing. Because it wouldn’t be cost-effective for a company like Smucker’s to have its own salesperson in each market where jam is sold, brokers do the selling for them.
Osage Marketing represents 20 to 30 manufacturers at any given time, said Tim Hacker, sales manager at Osage, adding, “Our company does best with national product lines.” It takes those items and markets them to “about 20 different food-service segments,” he said. For example, Osage salespeople would hypothetically show school distributors lunch products like Uncrustables and applesauce. Diners would be given presentations on breakfast items like jelly, hash browns and bagels, while white-linen customers would see completely different foods. Selling complementary product lines – but not representing two manufacturers of any given product – is a key to brokers’ success. “We have to be pretty well versed in all the food-service segments,” Hacker said.
Although one might assume that distributors and brokers would appreciate large-scale business, Hacker and Kammeier said that independent restaurants are a very important segment of Osage Marketing’s business. Not many new distributors tend to enter the market, meaning the only way to expand that aspect of the business is to sell existing distribution customers new products from their current manufacturers. And unlike sales to independent restaurants, sales to chain restaurants usually don’t generate commissions for Osage Marketing’s employees.
Buying products from local producers is a buzzword – and often restaurants truly do have that as their goal – but in reality it presents challenges. Foley found that out when Bon Appetit had a nationwide event called the Eat Local Challenge in late September. On that day its affiliates were encouraged to use suppliers within 150 miles of their location for center-of-the-plate, produce and dairy items.
Foley participated with two of Washington University’s food-service locations. “For what we were trying to accomplish, you couldn’t do it for [the whole campus],” said Foley, who oversees the feeding of 8,000 to 12,000 people a day. “We have 17 outlets, so certain outlets were better suited to it.”
Although Foley tries to buy from local suppliers for day-to-day items when possible, he said availability is a challenge, particularly at an institution that’s in session outside the Missouri growing season. In the fall, local farmers “go from having 10 to 15 products down to two or three – maybe root vegetables and squash,” he said. “To give the kids variety we have to outsource.”
A glance at Riddle’s menu illustrates that Ayers is also a proponent of local products. But he’s a restaurateur first, so he doesn’t buy everything that comes his way. “The stuff you get locally should be the best available,” Ayers said. “I don’t buy local products that are inferior.”
He’s also loyal to longtime suppliers and eschews pitches for duplicate products regardless of price. “I’m not going to lowball Bob Lober on squash,” said Ayers, naming a favorite farmer. Prospective suppliers need to find something Lober doesn’t grow at St. Isadore Farm in Moscow Mills, Mo., plant it, grow it successfully and let Ayers know when it will be ready for harvest and how much there will be. Then he’ll consider it.
Beckie Jacobs of Serendipity Homemade Ice Cream knows that there’s a big push for restaurants to buy local – but she realizes that just because she owns a shop in Webster Groves doesn’t mean business automatically comes her way.
When she started out about two years ago, she said, “I first of all made sure I got my hands on the best ingredients.” Then she ate out a lot, bringing samples for the chefs. Sometimes she would bring something new, sometimes a flavor that was already on the menu if she thought she could beat it.
Now that the business is up and running, “I’m kind of like the Wizard of Oz,” she said. “The guy who plays the wizard is everywhere. So am I.” That can be both an advantage – she knows what’s going on with every aspect of her business – and a handicap, especially when she’s making a last-minute delivery for a product a chef needs for the upcoming meal service.
She’s not equipped to take electronic orders, not even by fax, but she does give customers her cell phone number. She bends over backwards in other ways, like in making custom flavors for restaurants. “I just spent several days with Dave Owens [of Terrene],” Jacobs said. “We did four flavors … and two sorbets.” For another customer she takes on the challenge of coming up with a flavor du jour.
Like other industries, food service relies on just-in-time delivery. Most restaurants are restocked at least once a week, and larger ones often get two or more weekly deliveries from each supplier.
At Sysco, “our orders are 24-hour turnaround,” Arnot said. Products go out from a distribution facility in St. Charles, which is in turn restocked from various warehouses around the nation.
However, in Virginia the company has just built the first of what will be nine regional distribution centers intended to consolidate its buying and decrease its fuel costs. Eventually all its local houses will buy canned and dry goods from what in effect are internal Wal-Marts, Arnot said. When the network is complete, the St. Louis operation will “shop” in Chicago.
There’s a romantic notion of chefs going to the market each day to see what’s fresh – which perhaps they do someplace where farmers’ markets are open daily. Here a weekly plan is more realistic.
Ayers has a system all worked out. “I can do very well at the farmers’ market at closing time,” he said. “They’re more amenable to dealing then.” A summer Saturday may find him at the Clayton Farmers’ Market around noon, at the Central West End’s GreenMarket at 1 p.m. and over in Soulard later in the day.
On Sunday Ayers and his staff do an inventory. He takes the reports and puts them into that week’s order, revisiting it if needed later in the week. During the day on Tuesday he’ll make the rounds of retail stores – perhaps visiting Sam’s Club for paper goods, Trader Joe’s, Penzey’s Spices, Schnucks. “I buy a lot of stuff at retail, more so than most people,” he said. He also values some suppliers enough that he will drive to pick up from them.
Meanwhile, back at the restaurant, his wife, Paula, runs the show during the day, baking, doing food prep and receiving deliveries. “Everyone knows it’s got to pass through Paula and get her signature or they’re taking it back,” he said, only half joking. Although he said with most of his longtime suppliers quality isn’t an issue, there are times when “mispicks” happen. That’s when the mechanical robot arms that choose and box up orders in the warehouse grab the wrong product or cause breakage that’s not detected until the delivery is made.
In general, about 30 percent of a restaurant’s budget goes to food. Regional disasters – the Hurricane Katrina damage to the poultry farms in Louisiana and Mississippi, for example – have a highly publicized effect on restaurant prices. Arnot said warehouse buyers purchase based on historical trends for a given week, and they can’t just cut back on the spur of the moment because the demand doesn’t go away. “It’s a food chain – that’s why when things like the hurricane occur, it’s very dicey.”
However, sometimes the reasons behind price increases are less obvious. The recent rise in petroleum prices means plastics cost more, which means consumers might see food prices increase. “Any take-home item you buy from a restaurateur, maybe it used to cost them 10 cents. Now it costs 15,” he said.
Routine commodity futures prices – the somewhat cryptic reports for beef or corn that you hear on the radio – affect what restaurants pay as well. Recent spikes in dairy, chocolate and vanilla prices meant Jacobs had to increase the tag on her ice creams. Those prices have since stabilized or even come down, but her prices have not because now she has greater delivery costs to deal with.
Seasons also affect prices. It’s not so much a matter of prices going down when corn is in season – restaurant owners often bemoan the good old days when that used to happen. Instead, there are predictable surges in demand. Right now the price of beef tenderloin and other center-of-the-plate items is crescendoing toward the new year and the impending holiday parties, Arnot explained.
“One of our primary goals is to help the operator become more profitable,” Arnot said. That means Arnot, a former restaurant owner himself, helps his customers plan for price spikes and “be proactive, not reactive.”
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